Artificial intelligence (AI) stocks are falling, and most analysts are linking the dip to Broadcom’s (NASDAQ:AVGO) recent earnings, where it retained its 2026 revenue guidance at $100 billion. Investors were expecting guidance to increase rather than remain stable. But there are other factors too. OpenAI and Anthropic are looking to enter public markets with an initial public offering (IPO). Remember that there is a vast difference between filing for an IPO and launching one. Since SpaceX launched its IPO, the other two visionary companies are following.
These IPOs could be a reason for AI enthusiasts pulling their money out of AI chip stocks, as they can finally invest in AI models. Value investors might be up for disappointment, seeing how much cash AI software companies are burning. The whole IPO episode could go either way. It could overvalue the stock, given the excitement around AI, or it could meet the fate of the many tech stocks that debuted in the 2021 tech bubble, only to lose 80% of their value in 2022.
We are at the crossroads where one decision can turn your $7,000 Tax-Free Savings Account (TFSA) account into $70,000 or $3,500 in the next decade.
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How to turn your 2026 TFSA contribution into $70,000
Tech stocks are the best chance to convert $7,000 to $70,000. I have been bullish on Broadcom, and the recent 22% dip in June 2026 presents a buying opportunity. Because the fundamentals have not changed. Its second-quarter revenue from custom AI accelerators and AI networking surged 143% year-over-year to $10.8 billion, above their guided range. It is expecting a 200% year-over-year increase to $16 billion in the third quarter of 2026.
The dip is not because of fundamentals or valuations, as none of its clients have pulled out of their investments in AI infrastructure. It is because of the fear of an interest rate hike and the anticipation of Anthropic and OpenAI IPO presenting competition to AI valuations. How these IPOs will fare is a black box. On one side, investors have chip companies showing real return on investment. On the other side, AI applications are yet to justify the high capital investment.
The 2022 tech meltdown is possible as the market is once again showing signs similar to 2021. The tech stocks are priced to perfection, many new IPOs are hitting the market to take advantage of the hype, and interest rates are low, but they could increase. Institutional investors are withdrawing money at the slightest fear of a rate hike.
Broadcom is still a stock worth buying at the 20% dip, as it will benefit from AI chips and the infrastructure software that follows.
Investing in a technology ETF in 2026
You could also invest in the iShares NASDAQ 100 Index ETF (CAD-Hedged) (TSX:XQQ). The ETF will benefit if the AI and SpaceX IPOs are a big hit, as they will debut on Nasdaq. The ETF has exposure to all big tech names and can give you market-linked returns. Its 0.35% management fee is also cost-effective considering the ETF’s ability to generate a 20% average annual return in 10 years.
A $3,500 investment each in Broadcom and the Technology ETF can help you reach closer to the $70,000 target in the long term. The two can use the core-satellite strategy, wherein the core represents a stable investment with assured market returns, like the XQQ ETF, and the satellite represents active investment in stocks with the ability to generate alpha.
Final thoughts
The journey from $7,000 to $70,000 needs a 10-year compounded annual growth rate (CGAR) of 23%. The technology ETF can give a 15% CAGR and reduce downside risk, while Broadcom can generate alpha to cover the gap between the ETF CAGR and the required CAGR for 10 times growth.
